July 27, 2011

Illinois’ Auditor General William Holland reports the state’s liabilities exceed assets so dramatically that Illinois’ net assets deficit is now the largest among all 50 states. Holland was able to compare the state’s fiscal year (FY) 2010 financial statement to all states but Hawaii, which has not yet been released.

The deficit in net assets is the difference between the state’s liabilities and assets. Examining a state’s net assets provides a state with a good picture of its fiscal health. Unfortunately, Illinois’ net assets have steadily deteriorated over the last decade, increasing from $12.8 billion in FY 2003 to $37.9 billion in FY 2010. In FY 2010, Governor Pat Quinn's first full year in office, the state’s net assets fell $8.4 billion.

Only three other states reported a net assets deficit in FY 2010, including California, Connecticut and New Jersey. However, Illinois' deficit far exceeds even those dubious companions. California reported a $4.2 billion asset deficit, Connecticut had a $13.7 billion and New Jersey shows a $28.2 billion deficit.

Holland also reported that Illinois’ general fund deficit has risen to a record $9.2 billion. The audit is one of numerous reports released by both state officials and private entities that reflect the state’s ongoing fiscal problems.

In May, Illinois Treasurer Dan Rutherford released a report showing state taxpayers’ borrowing debt has jumped to $45 billion—or $24,000 for every Illinois family. Comptroller Judy Baar Topinka has consistently cautioned that substantial structural budget changes are needed if Illinois is to ever eliminate its massive deficit.